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On the last episode of Recode Decode, Margrethe Vestager, European Commissioner for Competition, Recode Kara Swisher on stage at South by Southwest to discuss what should be her last year in this role. She explained how her team of regulators was working to strengthen the accountability of large technology companies and why she was encouraged by the commitment of Facebook CEO Mark Zuckerberg to pivot the company towards privacy protection. .
"The first stage of change is good intentions," said Vestager, acknowledging Swisher's pessimism that Facebook will really change for the better. "It's good that people decide. Do we want to contribute here? Do we want to pay with our data for this service? Or do not we want to do that? It's good if the market reacts then: "Oh, they want something else."
You can listen Recode Decode wherever you get your podcasts, including Apple podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.
Below, we shared a slightly modified transcript of Kara's conversation with Commissioner Vestager.
Kara Swisher: Thank you. Thank you. Thank you. I am so excited to be here. I have done a lot of events in South By Southwest but this is one of my favorites. I have met Commissioner Vestager several times over the years. And one of the things I have to say is that we discussed many years ago, before most of the election events taking place in the United States and around the world, such as Facebook and others. companies. And what is really clear is that she was very cautious about the damage that some of these companies could cause; It was kind of very strong for these companies. And so I must say, unfortunately, a lot of what you said has come true. So I'm very happy to be able to talk about what you think is next.
Let's start by talking about some of these things happening in this country, because regulatory oversight is starting for US companies by the US regulators. For the most part, the United States has given up its responsibility to regulate most of these companies to enable them to become huge and to create innovation.
So yesterday or two days ago, Elizabeth Warren, one of the Democratic Party candidates in the election against President Trump, presented a really very tough proposal aimed at regulating big tech. I would like to know what you think about it and how you examine its different proposals.
Margrethe Vestager: First of all, I think the positive thing is that the debate is taking off. When I visited people on the hill and spoke with them, I felt a new kind of interest and curiosity about what competition can do for you in a society. Because if you have fair competition, you have markets that serve the citizen in our role as consumers and not the reverse. And with regard to the very ambitious proposal to split up companies, for us, from a European point of view, it would be a measure of last resort.
What we are doing now is dealing with antitrust cases, abuse of dominance, tied selling, self-promotion, demotion of others, to see if this approach will correct and change the market, to make it a place fair. Where there is no abuse of dominance, but where competitors, small competitors, can have their share of success. Because they can be the next big, the next with the biggest idea for consumers.
So, you do not think that breaking is the best way to do it. Explain why a little more, why do you think breaking is a last resort? You want to try other things first.
Well, it's very ambitious. We are dealing with private properties, companies that we have built and invested in and succeed with their innovation. So, breaking a business, breaking a private property would be very ambitious. And you would need a very strong argument for this to produce better results for consumers in the market than if you could do it with more common tools.
And talk about how these tools worked. Some people now feel one of the other proposals. I spoke to Senator Klobuchar, Amy Klobuchar, who is also a presidential candidate a few days ago. Previously, she had asked the FTC to renew Google 's investigation of its use of market dominance, which … they sort of crossed the FTC years ago and did the same thing. subject to investigation and nothing has happened. You had a different result with them in Europe. Talk about this, this is another presidential candidate who is talking about these issues.
We are very busy with our day-to-day work, so we do not try to fix or do better with our colleagues because they know their market well. But one of the things that I think is very interesting is the initiative of Joe Simons, the new president of the FTC, to hold a number of hearings. In my view, a kind of inventory exercise to see what is the current state of the market.
We are doing something similar, we have done some kind of e-commerce survey to see how e-commerce is going in Europe. This has resulted in the number of instances where we see companies geographically blocking, without serving consumers as they should. So, in some ways, we have parallel development, except of course for the basics.
So now we are processing the last of the three Google cases, we already had an Amazon case. We had tax affairs with Apple, with Amazon. We now have the new or kind of very preliminary to consider more widely the use of data by Amazon. And of course, we're also moving on to social media, Facebook, about how data is used in this regard.
So, that's a lot of cases. This is a lot of cases and there are none in the United States at the moment. Do you cooperate with the Trump administration on this? Have you already cooperated a lot before or not?
We are always cooperating and it's the same thing. I think we have a very strong working relationship, not only with my colleagues and myself. We will meet regularly, but also at the team level, when companies have granted us the necessary exemptions. We would compare notes, discuss theories of prejudice to inspire each other. Of course, we must always recognize different jurisdictions and different cases, but we can share what we think. Because, as in any other case, it makes sense to talk to colleagues.
Well, they are also global companies.
He is indeed.
So how does it work now? Is it the same level of cooperation?
Yeah, more or less right, I'll say it. Yes.
You would say so. And when you think of the idea that it is about global companies, how can you not quite work as a group? Or do you think it just has to be in different markets? The way these are regulated.
Well, I would say we do it. We do not have a global regulator. I think it would take a while and we had to do a lot more before we got there. So we have an international competition network. There are 130 jurisdictions and law enforcement forces coming together. Very low protocol, but very high on the bottom. So we talk a lot about trying to inspire, to give impulses – well, how do you see things, where you work, in relation to where we work.
Second, of course, when our legislator does things that will change the market. Like last year in Europe, we had what we can call the rights of digital citizens, namely that I have my data, that I can move my data, that I can be forgotten, to mention only three things. It's very encouraging to see this inspiring legislation in California. We talk about it all over the world, I think.
In the United States, privacy.
Yes.
They will not be right to be forgotten. I think it will not be something that will never happen in this country. But when you try to incite them to do this kind of private life. There is therefore no national privacy built in the United States. In California, there will be one that will come into effect in 2020 and which, in the opinion of many people, is not strong enough in relation to European legislation.
I would say in Europe too, we still have some way to go. Because I really enjoy having rights, I would be even happier if I could exercise them. Because I know I own my data but I really do not know how to exercise this property. How to allow more people to have access to my data if I want to enable innovation, with the arrival of new players in the market. If this were done on a large scale, you might have some sort of innovative introduction to the market. And we are not there yet.
Senator Klobuchar raised the idea of taxing companies for using data when transmitting it to third parties. So when they use it for something other than what was originally said – and you know that there is example after example, these companies said, "Oh, we used your data for that" or Google, "Oh, we installed a camera that we did not talk to you about," or "Oh by accident, oops, we gave it to Cambridge Analytica and they used it for bad things. "
And it's always, "Oops," and "I'm sorry" and "We did not know it was used." And one of his proposals is that they be taxed whenever this happens and another proposal is for people to be paid for their data. If you use your data and save you $ 10, the consumer gets a few dollars of that money.
That would see, I think this is still in its infancy in Europe, but since we now have the rights that establish that you own your data, we see the beginning of a kind of development of the market for intermediaries saying : "Should I allow you to monetize your?" So, it's not just a giant to monetize your data so you might get it every month which reflects how your data was transmitted .
This is a second opportunity from the point of view of competition. We are trying to find a way to make sure that the huge amount of data will not be a barrier to market penetration or will only be used by you who has the data to innovate. But, as a newcomer, I do not have access to the data, which means that it will be extremely difficult to innovate and develop services.
So, you leave your office in how many months?
Oh, I do not count that. It would be discouraging.
Soon, though.
I will be finished on the first of November.
November, 1st. One of the really interesting things over the years is how big tech companies really you hate and find yourself having to be too hard on them. How would you rate your mandate? And what are the successes?
If that's true, what I doubt
But that's true. They do not hate you personally.
But if that's true, I should take that as a mark of honor.
Yeah.
But if that's true, I think they're somewhat underestimating the team's efforts. Because yes, I may have left on November 1st, but there will be a new one and there will be a team and a second team and a third team and a fourth team. Because I think what we do reflects the fact that we want our democracies to define the direction of our society, not that businesses do the same.
How do you think they managed to guide our society?
I think that until now, they have done very well.
They did very well financially. But how do you think they have managed to take responsibility for the data and information they have?
Well, we have witnessed interference in national elections, referendums. We have seen a lot of data breaches. We have seen an economy that uses a lot of unprecedented data. We are in full revolution, a technological industrial revolution. And I think that as corporations, we have a lot of backlog to take control of.
Just like in the days when we had a kind of industrial chemistry revolution, when pesticides and everything else became, you know, the big guy in town, people thought you could do incredible things. Spray everything, add everything to the products. It took us some time to realize that we needed to take control because otherwise it would affect our ability to procreate all that for drinking water.
Now [we are] to the last degree of control of that, and I think we want to do the same thing. In my home country, we talked a lot about chemicals in baby bottles. Huge discussions. If you say, "I never asked my baby to have a bottle," but you do not have the idea to give him an iPad.
Right. Well, I have a little doubt, but they will still have it. But why? Where do you think their conscience is? Is it because of his addiction or what do you attribute to it?
I think the scandals have caused a lot of doubts. Suddenly, it was … a kind of wake-up reminder button was gone. It was right there in your face. Something must be done about it. Of course, we need to know more about their activities in the market, what the teams and I do. What they do when it comes to addiction, when it comes to false news, when it comes to interfering in elections.
Imagine, in your opinion, what were the main attributes of your mandate? What do you think are the most important cases? Talk about a few of them.
First of all, many people do not see what is under the iceberg under the water. We still do a lot of things with fairly traditional companies, because concentration in these companies is also a problem. If there is no one to whom you can turn when it comes to the price of cement, well, then that is reflected in the construction industry. And that's important too.
So we have a lot of things to do in steel, copper, cements, as well as in the food industry. We have a number of agrochemical product mergers. All this is very important to us because they will also scan, one. And secondly, if they are first focused on this competition, we will see the effects.
That said, I think that digital business, but also tax affairs, is very important. Because we can not have societies where we are only citizens, we pay taxes and all the many small businesses contribute. If you do business in a country and you create value in a country, you also have to tax that country.
Now, does Google pay more fines than taxes, is not it?
Oh, I did not do the math, but it's not improbable.
Yeah. So that's it. It's true they do it. How do you change taxes? And now again, this is being discussed in this country. However, a number of people are raising Elizabeth Warren, representative of Ocasio-Cortez, to the idea of not only more paying companies, but also wealthy citizens, many of whom run the tech companies that happen to be the billionaires in this moment. How do you see these efforts? The idea of changing tax systems, how difficult was it for you?
It may be a difficult climb, but it is urgent to do so. When we compare numbers, we find that digital businesses would pay an average of 9%, while traditional businesses pay an average of 23%. Yet they are in the same capital market, skilled employees, sometimes competing for the same customers. So obviously, it's not fair.
My colleague Pierre Moscovici is at the head of this work. So we tabled a proposal to change that. For business taxation to understand, as a concept, how value is created in a digital world, what it means to be present in a digital world. Unfortunately, we had a lot of resistance to that, which means that now individual members stay in the union. In Europe, France will implement digital taxation this year.
Yes, I want to get there. But go ahead. Yeah.
And I think it's an absolutely necessary thing, but it's very unfortunate, because you get a much more fragmented, much more unpredictable picture, how does the system work from a business point of view. How will the system work to make it predictable? We therefore hope that these individual efforts will lead to a way of proceeding on a European scale and, of course, in the OECD. Because the OECD feels that many countries around the world are interested. Also in the American side of things.
And when we think of taxes, there was this famous exchange in Davos this year with, I crush his name. [Rutger Bregman], the historian who was arguing about the idea that taxes are the way to achieve this rather than fines. You can impose any fines you want, they can pay them. Google, they have money in their wardrobe that they could withdraw and put back to you, they do not care. Is this the best way to do it? Create a fairer tax system for these companies? Or are you going to just fine them in the next century?
You get fined when you do something illegal. You pay taxes to contribute to the company in which you operate. And these are two different things, and I think we absolutely need both. But we can not have a situation where some companies do not contribute, and the majority of companies do it. Because it's just not fair on the market or to the citizens if it continues.
Do you imagine … One of the arguments against which they also oppose is the idea that the GDPR and other laws pbaded in Europe, or regulations, are easier for larger companies. So, you favor large companies, it is their current argument, you favor large companies. And the leaders of Facebook, Google and other countries told us this: "We have as many lawyers as you want, we are great, we are doing well. You can apply all the rules and laws and everything you want because we are advantaged. And that compromises small businesses that may not have the required capabilities. This is one of the reasons why we should not have your laws.
Well, we sort of hooked on what you have to do. Because if you have a small business and you're doing electricity, wood or whatever you do, you obviously do not have the same obligations as Google when it comes to managing your client registry, when you can send them an e-mail to tell them that I have a new promotion to do this and that.
So we have different media so that little guys do not have the same responsibility as big guys. And say that if they find it easy, I think they can do better. Because I always find it difficult enough to understand what you accept when you agree to your terms and conditions. And I think it would be nice if, as citizens, we could really see, "Oh, this what I enrolled and I am perfectly satisfied. "
Very often, I finish myself, even if I have five minutes to try to understand, I approve and I still do not know.
What do you use now? What else would you use? There has not been, in Europe … What is the alternative for Europeans? Why does not another company match Google, for example? Or to match Amazon? It tends to gain momentum and they have in own, I mean, Snapchat in trouble, a lot, maybe not in China, WeChat is doing very well. But in Europe, there is no alternative. What do you use to search now?
Right now, I'm using a French thing called Qwant. They are very strong in everything related to culture, but in general it works perfectly for me. There is also a German element called Clicks, which will also … both will ensure that you are not followed, so you have much more privacy than you would have with the gigantic competitors.
Do you use Google at all?
It happens, but more and more rare.
What would you use them for?
Well, I would use them mostly to see if they were changing.
Ah okay. And? No, do you use them for cards? Do you use them for mail? For something like this?
No I do not
Because?
Because I find that I have better alternatives that provide me with more privacy.
More privacy. And what about Facebook?
I have a Facebook page, but it's sort of become something whose Twitter feed feeds Facebook.
D & # 39; agreement. And you use Twitter?
I do.
Why is that? Because you love the cesspool that he has become?
No, but I come from a very small party. And when Twitter was new, we thought, oh wow, not only is it new, it's free.
It's not free, but go for it.
No, but you know, we do not have a lot of money.
Right.
So we went into that. I was unhappy at first, but then we understood each other well and got used to it. And the problem is that in the beginning, we would not find as much hate as on Facebook. Because the 140 characters seem to put an end to this. I think that changed, I think the enemies, they get used to 140 characters too. But that's one of the things that I really liked, that you can have an interaction. But it was very often on the bottom, or with a sense of humor, or irony.
Do you use Nest? Or Amazon Echo? Or one of the home devices that they have?
Definitely not.
D & # 39; agreement. And why? And who is …
Why would you do it?
I do not know, you might need a recipe, find out how much butter is an ounce or something else.
And with that, would you pay with your life?
Yes. What do you think will happen when things go in the house? I'm trying to get an idea of what you think, if they are too invasive, all those things, as they move.
One of the things that really concerns us is how to choose if you have the floor.
Right.
Because if you ask a camera: "I would like to change for summer tires, where to go?". You would be too impatient to listen to five different offers, they could have a room for you …
Voice search is a big problem.
So, how to have competition when you have a voice search?
You do not.
That's the goal.
Yeah.
So, how would that change the market? And how would we deal with such a market? So that's what we try to understand. We are trying to understand how access to data will change the market. Can you give different access to the data? Because whoever holds the data also holds the resources for innovation. And we can not rely on the big ones to be innovative.
Do you think that they have changed with your influence, these companies? What is your relationship now with Google, Facebook, Amazons?
Relationship and relationship. I do not know, compared to what?
Compared to someone? Have you a? Do you feel like they're listening to you? Do you feel that what you tell them has collapsed? Where do they go?
Well, yes, we do have a relationship.
Right.
And we work …
It's not like, "Oh my God, she went again here, she came back here," sort of.
Well, it's the United States, everyone is very polite.
Right. What part of the United States do you go to? Right here, maybe.
No, but you seem really nice.
Yes, we really are. So, maybe compared to the Dutch, or whoever it is. The Dutch always tell me that they are rude. You appear very polite, but do you think you have changed your mind within these companies? Or did he change the mind of the management about what she did? Or are you a nuisance for them? Do you still feel …
I think it's pretty hard to know because it's hard to see what their future strategies are, how will they go to all citizens, where they are used. It's not the relationship with me or my teams that matters. The important point is, do they think of people who are not just users but also part of their production? How will they understand us in the future? As citizens who use the service? Or as part of a production machine? As part of monetization to create an even more impressive advertising sector? I think this is the kind of more strategic for themselves. Now, with the announcement of Facebook, I think they're calling it the "Pivot to Privacy?"
It does not matter.
If it is to be …
No, I really think, read my column.
But if they implement it …
It's a memorable memoir of bullshit. What?
If they implement, they act.
Yeah.
I think it's a sign of change.
Why do you think this note, Mark Zuckerberg wrote, is primarily a merger, basically, of the merger of all things, WhatsApp, Instagram and Facebook, into an unholy box. And then, he has now decided that he would like to be Snapchat, I think that's pretty much what he's decided, it's the best deal for him in this environment. What did you think when you read that? I know you think, "Good intentions, suddenly he saw the light."
Well, I think the first step to change is the right intention.
D & # 39; agreement. The road to hell is, but go ahead … paved with them, apparently. So many good intentions that … Do not you think so, he thinks it's, I think it's … I wrote a column today saying that it's is all about the data. He saw the data, young people can no longer support the big inflated blue application and they do not want to contribute. And they are interested in privacy and other issues. And so, he has seen the numbers and he has now decided to embark on a new venture where he can probably find a way to make a lot of money by doing this.
But a few things … and what you say is good. It's good that people decide. Do we want to contribute here? Do we want to pay with our data for this service? Or do not we want to do that?
Right.
And it's good if there is a market response that respects: "Oh, they want something else."
Right.
"They want privacy. They do not want to spend as much money with data for a service that they do not find worth it. "
Do you trust this company with your privacy? If they decided to say now, we attach a lot of importance to privacy? A company that has again and again violated …
But no change comes with saying he.
Right.
It's like, you know, "I'll never eat those Belgian chocolates again."
Agree, agree.
Ce n’est que lorsque j’ai tenu ma promesse pendant des semaines et des semaines et des semaines et des semaines que c’est ce que tout le monde devrait …
Ce que je demande, c’est que vous pensiez que c’est un changement d’attitude sincère vis-à-vis de l’importance de ce phénomène? Ou est-ce juste une entreprise, vous vous en souciez, vous ne vous en souciez pas? De quel côté est-ce?
Eh bien, cela m’intéresse, mais lorsque j’ai pris note de cette promesse, j’ai dit: «Eh bien, nous en prenons bonne note, mais lorsque vous la mettez dans la vraie vie, alors bien sûr que c’est quelque chose.
Droite.
Parce qu'alors, les utilisateurs auront non seulement une expérience utilisateur différente, mais aussi un produit différent qui respectera leur vie privée.
Lorsque vous parlez de concurrence, l’un des domaines dans lesquels ils se dirigent est la présence de plusieurs services tels que celui-ci, Snapchat, du moins dans ce pays, et c’est également en Europe. Ils entrent directement dans les affaires de quelqu'un d’autre, des rivaux. Comment protégez-vous la concurrence si tel est le cas?
C’est bizarre. Lorsque Microsoft s’est lancé dans les affaires d’AOL, il a décidé de s’y lancer avec un produit qui a échoué, bien sûr, parce que c’était un produit terrible. Mais ils ont essayé de s'y installer et d'utiliser leurs avantages pour sauter, sauter et sauter dessus.
Le premier cas Google en est un bon exemple. Parce qu'ici, vous avez quelqu'un qui essaie de se mettre à la boutique et au commerce de comparaison.
Droite.
Le premier produit Google n'a pas fonctionné.
Ce qui a été fait appel, c’est, ils ont fait appel.
Oui, c’est un appel, mais c’est juste les mécanismes.
Droite.
Les premiers produits Google en magasin et en comparaison, cela n’a pas fonctionné. Alors ils ont appelé …
Froogle. C'était Froogle.
Oui oui. Ils ont donc appelé en quelque sorte les gros canons qui ont fouillé. Et puis, et ils ont recréé leur propre produit, puis ils ont fait la promotion de ce produit afin que ce soit la première chose que vous avez vue. Et ils ont rétrogradé leurs concurrents, leurs rivaux, en moyenne à la page quatre. Quelqu'un est-il déjà allé là-bas? En moyenne page quatre résultats de recherche?
No.
No.
No.
Non, vous pouvez y aller, mes secrets sont là, c’est parce que c’est un endroit absolument sûr. Et cela montre en quelque sorte le mécanisme: si vous êtes une entreprise dominante ou si vous avez beaucoup de puissance sur le marché, vous pouvez vous promouvoir au détriment de votre concurrent. Et c’est bien sûr le genre de choses que nous examinerons. Et ce que nous avons appris du premier cas Google, c'est que si quelque chose se produit, nous voulons en apprendre plus rapidement, car la vitesse est essentielle ici.
Mais je dis, imaginez-vous qu’ils ont vu la lumière, à partir de votre lecture, allez-vous attendre et voir?
Mais voir des lumières est une chose religieuse; faire des affaires et gagner de l’argent, c’est une autre chose.
Mm-hmm. Mais sincérité, vous sentez que cette chose était sincère? Que nous allons réellement, "la vie privée est importante pour nous maintenant."
Quand vous faites ce que vous dites, vous le faites.
D'accord, d'accord, tu vas attendre et voir. Je ne les crois pas dès le départ. Je vais attendre et voir s’ils font réellement quelque chose.
Yes.
Je vais supposer le pire, je vais supposer le pire. Parce que je pense que jusqu’à présent, c’est ainsi.
Il peut être un peu ambitieux d’badumer le meilleur.
D'accord, d'accord. Ok, c’est une belle déclaration. Vous voyez, c’est une façon très polie de le dire, commissaire.
Donc, je voulais parler de quelques autres choses, et nous voulions poser des questions au public.
Mm-hmm.
Qu'est-ce que tu vas faire ensuite? Quelle est votre prochaine chose?
Eh bien, j'ai demandé à avoir un autre mandat en tant que commissaire à la concurrence. Pas avec les applaudissements de ceux qui feraient la promotion de cette idée, mais j’ai appris que vous n’avez rien si vous ne le demandez pas, pas même un «non».
Alors, qu'est-ce que tu vas …
Donc, il reste à voir.
Ça reste à voir. Mais si vous ne le faisiez pas, qu'est-ce qui vous intéresserait?
Eh bien, j’ai … L’un des nombreux privilèges de ma vie est de pouvoir travailler avec quelque chose qui a du sens pour moi. J’ai servi des citoyens dans de nombreux postes différents. C’est donc ce que je devrais rechercher.
Chose dans un même quartier? Et l'idée de confidentialité et / ou de concurrence?
Oh, là-dessus, j’ai l’esprit complètement ouvert parce que j’ai vu que, parfois, vous savez, la planification fonctionne comme un œil aveugle. Mais la prochaine meilleure chose est ici. Vous ne voulez pas les aveugles de la planification.
Et courir pour le bureau?
Eh bien, je suis un peu candidat aux élections, car si vous demandez le prochain mandat, vous devrez être approuvé par le Parlement européen. Ce serait bien sûr le premier obstacle à être nommé par le gouvernement danois.
Oui, mais je parle de bureau dans votre propre pays. Vous imaginez-vous en faire plus là-bas?
Oh, peut-être éventuellement. I really, really, really think I will be an old woman, really old woman, not as I’m now. So plenty of time to do that, because I have been very careful, I have never burned any bridges because Danish politics is, it’s quite good.
Do you imagine ever running the country?
No.
Why’s that?
Because I’m from a very small party, and that would be a, sort of, a real sort of historical glitch, if that was ever to happen. It has only happened once that someone from my party was running it.
Couple more things around where we’re going. If you had to think of where we’re gonna be in five years and 10 years with a lot of these companies, what would be your worst-case scenario? And your best-case scenario for each of those? Say 10 years out, because these companies are only 20 years old, or less, 10 to 20 years old.
Well, best case, a couple of things would happen at the same time. First and foremost that our legislature, would be willing to take sufficient steps, both in taxation and in regulating access to data, and fairness in the marketplace, as was just done in Europe with the business-to-platform agreed proposal to put in not only fairness and transparency, but also responsibility on the big guy to be available if things have to change.
And we would also need to see technology to develop, to have new players. Because we still have sort of, we still need to see what will happen with quantum computing.
AI?
What will happen with blockchain?
AI and robotics.
What other uses are there for all of that new technology. Because I still think that it holds a lot of promise, but only if, sort of, our democracy will give it direction, then you will have a positive outcome.
What’s your worst-case scenario?
That we have all the technology, but none of the societal, sort of, positive oversights and direction for our societies.
Is there one upcoming technology that you’re more worried about? Self-driving? AI? Robotics? Automation? Replacing body parts? Brains?
Well, we have a lot of robotics and automation. And I think self-driving cars is, well, it’s here, only not in full scale. I would wish for AI to be developed human scale so that we always make sure that it’s someone that serves our purposes and that we can have human oversight. And then of course there’s a huge risk that AI just reproduces the biases that we have already.
It does because of the lack of diversity in creating it, too.
Yes.
Is that something that you are already thinking about? Regulatory frameworks?
My colleagues … It’s not with me, we have been self-contracting, they’re in the process of finalizing, sort of, they are non-binding yet, but still, I think they are the first guidelines for a trustworthy AI. Because we tried to sort of think long-term that maybe you would think, “Oh, this will be difficult, how to develop AI if I have to make it trustworthy?” But the point is to say that if we’re not being very careful, then people will revolt against it and find that it is not serving our purposes, it is serving other purposes.
So for AI to be a real thing, we think it’s very important here, relatively early days, to make sure that we have an ethics framework.
Last question, where do you see innovation in Europe? Because there hasn’t been a giant company of the size of Facebook, Google, Amazon, and the Chinese companies, the WeChats and everyone else. Why has that not happened in Europe? There’s been Spotify, there’s been a couple of companies, but nothing of a mbadive scale. Is there a reason for that, do you imagine? Is there too much regulation? Qu'est-ce qui se pbade?
No. Three points in that, because we discuss that a lot. One thing is that the ecosystem, which is a very lively, interesting ecosystem that has developed very interesting businesses, a lot of that business has been sold to the digital giants. One could be DeepMind, that is now a Google property, doing amazing thing, actually with UK public data on health. So that’s the reason for it.
We have the ecosystem, we have the people with the bright ideas, the entrepreneurs, all kind of very skilled people, but we have been missing out on two things. One, to have a digital single market, so that you can think scale from the very initial starting point. That we have now and are developing.
And the second thing is to have a capital market that worked for you. Because I really envy the way it works here, where a lot of businesses will go into the marketplace, they would find capital, and they would find new competences. Because very often with money comes someone who will provide you with what you need in order really to scale your business.
Right, expertise.
In Europe, the tradition is much more going to the bank and create debts. And we would want a development of our capital market to be the same. That you go in the marketplace, you sell 5, 10 percent of your business, you get on board someone who will allow you to get the drive really to scale it. And this we have been in the process of making over the last five years, and we’re starting to see it taking off.
Are there other governors that keep it back? Because it really is, it’s an astonishing display of not enough innovation. Some people in the US say there’s too much regulation, that the risk tolerance is too low, that there’s not a mentality of entrepreneurship. Do you disagree with this?
Well, we are indeed different, but I don’t …
But you like privacy too much.
More than that.
Right.
But I don’t think it’s that. You know, Europe is an amazing place. We have made it so far since the Second World War when things were … Europe was destroyed physically, but also spiritually. With the transatlantic friendship we rebuilt it, and if we lack something I think it’s confidence, because it is as if we’re sitting on all this tacit knowledge about what we have achieved. Not realizing that when we had made it so far, of course we can make it even further.
Now having a much better capital market, a real digital single market, and having an ecosystem of innovators that has changed dramatically over the last 10 years.
So you see a big company coming out of … because you can see them coming out of China one after the next. You see India is investing, there’s a lot of really interesting innovation coming out of France.
Yes.
There’s some stuff going on individually in France, but do you think the next biggest company will come out? I was thinking about a debate I did at the Oxford Union, they had US people and British people talking about the next great company will come out of “blank,” US or Britain. There was our side that argued it would be US and why and the British side, because it was a game, the British side won.
The fact of the matter is what came out of the US was Uber— those Oxford people — was Uber, Pinterest, what’s about to go? You know, Lyft. All these companies are about to go public. Airbnb, and do not the European company. What will it take to get a great important company out of Europe? A big one, I mean a large one? Leaving Spotify aside and some others.
I’m leaving SAP aside as well.
SAP. Yes.
Because those would be the two main.
Yes. Those are the two main ones.
Well, of course it will take all the obvious, that you have a brilliant product, because I don’t think that should be underestimated. That one of the reasons why a number of these companies have been doing very well in Europe is because they have great products. They have disrupted markets that needed to be disrupted. They have created innovations that we really needed, so obviously, you need first of all a great product. You also need fair competition, which means that access to data, that no one is gaming the marketplace. That of course is why need strong law enforcement.
All right. Questions from the audience for Margrethe? Commissioner Vestager, sorry. Right here.
Bennett Richardson: Hi there. Bennett Richardson from Politico. I have a question from our EU political editor, Ryan Heath, for you, Commissioner Vestager, which is looking forward towards November, who do you think would make an amazing next commissioner for competition? And would you have any advice for them for what they should pursue in 2020?
Margrethe Vestager: I’m quite … I take it as a given that whomever it will be, and every member state will put on some, name one. I think they should name two, a man and a woman, so that we could have a gender-balanced commission. That’s another thing. I do hope that we have over the next coming months have prepared for the next commission to take action, to see if we need new, sharper tools in a completely digitalized economy. Not only so the digital natives that we’ve been speaking about today, but also all the many other companies who do digital right now, on access to data, on the role of platforms in terms of innovation, to prepare for that push during the next mandate.
Then of course never to forget all of the amazing traditional industries, where we’ll also need to be aware of concentration. Then of course to work with other portfolios, because when we look outside of Europe to the global marketplace, we need a very strong push for fair competition. And here, tools from trades, from single-market tools like public procurement, a lot needs to be done. So just the suggestion that work is definitely not over. On the contrary, we’re in the middle of something.
When you think about what is unfair in other areas, was there one industry that you’re most concentrated on right now? Media or what?
Now what we see is that in the global marketplace also, for instance, state-owned Chinese companies will be very active. In Europe, you can of course be a state-owned company, but the state will have to act as a market participant. Otherwise it will be not fair, because a private company do not have all the taxpayers to potentially pick up the bills. We’re quite strict on this, you have to act as a private shareholder would act. It’s not a given that a Chinese state-owned company will operate on the same terms, so of course we’re very interested to see, how can we promote this? How can the fact that Europe is open for business be mirrored in other jurisdictions also being opened for business?
For instance, when it comes to public procurement — building bridges, roads, rails, whatever — in Europe, everyone is welcome. We want the same welcome when we make our offers in other countries. This is all outside of my portfolio, but I think we need that common push to have a much more fair global marketplace.
Are you worried about the impact of China? The active … I mean, they talk about it a lot in Silicon Valley, that you have the choice between us and them. Like the Chinese, which have the different rules around digitization and privacy and everything else.
Of course I respect that this is, but it is a somewhat self-centered choice to set-up.
Yes, it is.
I think we have in Europe a lot of things going for ourselves, because to a very large degree we’ve been successful in building societies that serve citizens and market that serves consumers and tech that serves humans. I don’t think that this is a choice, but I think that, for real, we should of course reconsider what role we want to play in the global market and how we will play it. I think there’s room to be more confident and maybe also somewhat more hard-nosed.
Okay, next question. Right here.
Elise: Hi. My name is Elise and I’m a coordinator of a project that’s actually funded by both the EU and the Creative Europe Program. My question would be a bit more towards the European elections coming up and in this situation we see that there’s still ways of populism rising. And that Europe is still taken as a scapegoat for many things. My question for you would be, what do you think you should invest more on? And could, obviously, research and innovation be part of the solution to revive the European project, but also culture and education?
Margrethe Vestager: Indeed. I think this is very much to the point, your suggestion, and you see that reflected in our proposal for the next seven-year budget. I think that the main research program would be funded in our proposal with 100 billion Euros. Also tripling, no. Yes, tripling the number of people who can do what we call the Erasmus+, which is that you can do exchange in other member states. For studying, vocational training, also as an adult when you want to re-skill yourself during your working life.
The last part, it holds a number of different benefits, not only do you get skills, but you also get new competences in a much more diverse, multilingual, multicultural environment. That is part of the strength.
We focus a lot on the business side of what makes societies work well. Also, exactly, education, the way education is pushed for is very important. That also we do in a different way than both the Chinese and here in the US, but exactly that combination of a huge investment in research and innovation and then having culture education to follow that.
How do the forces of nationalism effect even throughout Europe? Even effect what you’re doing, the idea that there is one way to think of consumers, for example?
What do you mean?
How has that affected your work? Has it, the fracturing of the coalition?
I’d say that competition was … enforcement is one other thing that has not been met with divided views. One of the things that we have been debating a lot in Europe is the question of legal immigration, how to protect refugees. I think as divided as in the US probably, but when it comes to competition or enforcement that has not been the focus on the …
People feel the same about privacy throughout Europe, still?
I think to a very large degree, yes.
For most of the countries of Europe.
Yes.
Is there any outlier?
Not in these areas, no.
Not in those privacy …
Privacy, competition, law, no.
And data protection, okay. Another question. Right here.
Audience member: A lot of what I think is difficult about these big companies is that they’re really appealing to the demand side. You’ve got scale from the consumers, so we benefit from having a bigger Facebook or a bigger Google, etc. Since our network is becoming more valuable as these companies get bigger, at the same time, we do have these concerns over our privacy. How do we as consumers need to think about the cost and benefits of being a member of these networks? What as citizens should we be talking to our governments about as responsible stakeholders as well?
That’s a great question, because one of the issues is whether antitrust should change in this country. Whether it’s to … right now, it’s consumer harm. As we all know, Amazon Prime rocks. You know what I mean? And the prices are low and wow, they deliver on time, and stuff like that. One of the issues they just recently, one of the subcommittees, the antitrust subcommittees has hired Lina Khan, who has some very different thoughts about how you look at antitrust. That it isn’t the consumer harm, it’s the competitive harm. In Europe that’s what they look at first, not consumer harm.
Well, in this country it’s different. It is based on consumer harm, where you can’t, you know, Google’s great, you get maps. Facebook is fun, I guess, for some people, because you get to meet people. Or Instagram, look, I put up a Story. It’s all fun and games until the bombs start dropping, as the old poem goes. So you get a lot of stuff, there’s a lot of benefits in terms of pricing. All kinds of things, delivery, convenience. What do you say to that when this is what happens?
Margrethe Vestager: Well, I think it’s part of a much bigger and much more fundamental conversation about what we really value. What is the good life? I don’t think it’s the same thing as a convenient life. I think a convenient life can be extremely boring if you’re never challenged with any hardship of everyday life.
I still think that it’s also an important discussion, because the convenient life would be wishful thinking for many people in every society still. For them, the everyday hardship is not the good life, it’s just hardship. We have a discussion both about inequality, inequality in opportunities and what kind of life should you be able to live in a free and open society?
And in that, competition or enforcement is only a tiny part of that answer, but it’s as if we’re not having this discussion. We just talk about convenience, “Oh, it will be convenient that my fridge is always full,” that is happening very fast.
Right.
Well, and then what?
Well, you do get Cheetos in two hours, I mean, come on.
Does it make you happy?
I don’t eat Cheetos, so no. But it does, there is an issue, there is some … I tell this joke all the time, but in San Francisco you see a lot of this stuff come first. Because it’s a bunch of white guys designing for themselves, so they’re trying to make their lives as simple as possible, like as convenient. Convenient is exactly the right word. I always say San Francisco is “badisted living for millennials,” because they get whatever they want, whether it’s dry cleaning or cleaning or Cheetos in two hours or whatever. I’m not sure if they’re happy, because a lot of … We just did a podcast with a guy named Chamath Palihapitiya, who’s a very well-known venture capitalist, and he was talking about the idea that you’re not actually happy with all this. Of course, he helped create it, so he would know, right?
It’s a really interesting question, but in the speed of it you do the stuff you get, maps, it’s hard to live without. It’s the addictive nature of convenience, really, and price too.
Yeah, but sometimes if you want to experience something new, you need to lose yourself a little.
Right.
You need to get distracted, you need to go left a way or to go right in order to challenge yourself and have a new impulse and meet people that were not in your Feed or in your bubble or in your echo chamber.
Well, it’s proximity. When your people are proximate to you, that’s who you reflect on versus …
Yes. I think that since we’re just humans, our skills have now developed so that we can detect if you’re truthful and you really want to be with me. It’s very difficult to develop that skill into the digital sphere, into social media. I think we don’t have the same sense of who we are, so obviously, we need to insist that social media and what have we, it is something supplemented, a real democracy where we come together and disagree together. Instead of just shouting at someone who’s sitting around another campfire.
D'accord. The final question, oh, here. One more quick one and then I have one more quick question.
Speaker 4: Hi. I’m Alex. I’m a European student and I’m a bit worried about some of these decisions, but these basically both things — a merger between Alstom and Siemens. The two basically big champions we do have in Europe for the railway industry. On the one hand we decided to block the merger, but on the other hand the Chinese did exactly the same as the opposite by merging their two champions and building a company which is now called CRRC. Obviously it will come in Europe, so don’t you think this decision could lead to bad news for European companies and European workers?
Margrethe Vestager: Well, exactly that, this question, they will eventually come in Europe is of course what has been center of our badysis. Because the thing is that if companies merge and you lose competition as we would in main line signaling and the very high-speed trains and the merging businesses chose not to solve that, then customers would have had to be able to turn to someone else.
In main line signaling, when we look into the future, there are no competitors. No one can live up to the European rules for safety, to be certified to do that. When it comes to very high-speed trains, as we speak, there are no very high-speed trains driving outside of China, so when you look five to 10 years ahead, we don’t see that in Europe.
That of course allows for two businesses who are not only European champions but also global champions to improve even more. Eventually, if the Chinese want to come out of the enormous Chinese single market, then they will have much more power to do so, because the benefits of competition is of course that it keeps the companies on their feet in order to be able to compete also globally.
Of course you need to push to make sure that then that global competition is fair, which is why exactly we need many tools. From trade, from procurement to work with us, because when we demand of our businesses to compete fairly then of course we need to stand up for them globally if they are being met with unfair competition.
All right. Last question from me. What do you think, of all the things you’ve done, your greatest legacy is going to be in this area?
Well, hopefully that when you’re our team, as we’ve been in the Commission as my services are organized when you work together then you can push change, not totally, not to the end, but you can contribute to something that will actually have hopefully a lasting effect to make sure that markets serve consumers, and that’s the point.
All right. Commissioner Vestager.
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